Fino Payments Bank Stock Crashes 20% on ED Probe Rumors

Introduction: Stock Plummets on Probe Speculation

Shares of Fino Payments Bank Ltd experienced a dramatic sell-off on Monday, March 16, 2026, tumbling by as much as 19.55% to hit a 52-week and all-time low of ₹136 per share. The sharp decline was triggered by media reports suggesting that the Directorate General of GST Intelligence (DGGI) might recommend an investigation by the Enforcement Directorate (ED) into online gaming transactions linked to the bank. This development added to investor concerns following the recent arrest of the bank's Managing Director and CEO, Rishi Gupta. In response, the bank issued a swift clarification, labeling the reports as speculative and unfounded, which helped the stock recover some of its losses by the end of the trading day.

A Day of Volatility on the Bourses

The trading session was marked by intense selling pressure on the Fino Payments Bank counter. The stock opened at ₹162.00, significantly lower than its previous close of ₹168.72. As the news of a potential ED probe circulated, the stock plunged, hitting its lower circuit limit and a record low of ₹136.00. The trading volume surged to 5,659,968 shares, far exceeding its 20-day average volume of 782,505, indicating a high level of investor activity. By midday, the stock was trading around ₹141.75, down over 16%. Despite a partial recovery after the company's clarification, the stock ended the day significantly lower, reflecting the market's unease.

| Stock Performance (March 16, 2026) | | :--- | :--- | | Previous Close | ₹168.72 | | Open | ₹162.00 | | Day's High | ₹167.12 | | Day's Low (All-Time Low) | ₹136.00 | | Volume Traded | 5,659,968 | | Market Cap (Cr.) | ₹1,169 |

The Catalyst: Reports of an Expanded Investigation

The primary driver for the stock's collapse was a report alleging that the DGGI, which is already investigating alleged GST evasion related to online betting applications, could recommend a wider probe by the ED. The report suggested that instances of suspected money laundering had been detected, necessitating scrutiny under the Prevention of Money Laundering Act (PMLA). This news came just weeks after the DGGI arrested the bank's CEO, Rishi Gupta, on February 27, 2026, in connection with the same ongoing investigation into certain program managers and merchants.

Fino Bank's Firm Denial and Clarification

In a detailed statement to the stock exchanges, Fino Payments Bank vehemently denied the media reports. The company clarified its position on several key points. It stated that the notion of an expanded probe by the ED or under PMLA was "non-factual and speculative." The bank asserted that it is currently not subject to any investigation by any authority other than the DGGI, Hyderabad. Furthermore, it reiterated that the DGGI's investigation pertains to certain program managers and merchants associated with multiple banks, including Fino, and is not related to the bank's own GST compliance. The company also corrected media claims that a bail plea had been rejected by the court, calling the reference "completely incorrect."

Distancing from Gaming and Betting Activities

A core part of the bank's clarification was its unequivocal stance on gaming and betting. The statement reiterated that Fino Payments Bank "does not directly or indirectly engage in or promote any gaming or betting activities through any platform, website or channel." This was aimed at reassuring investors and regulators that the bank's core operations are not linked to the activities being investigated. The bank emphasized that it is cooperating fully with the authorities and remains committed to the highest standards of governance and regulatory compliance.

Operational Stability Amidst Leadership Turmoil

Despite the negative sentiment surrounding the investigation and the CEO's arrest, Fino Payments Bank has sought to project an image of operational stability. The bank recently informed the bourses that its business fundamentals remain strong. As of March 13, 2026, its total deposit balances had grown by nearly 9% over the previous two weeks, reaching a record high of approximately ₹2,900 crore. Additionally, the bank reported robust customer acquisition, opening around 1.5 lakh new banking accounts since February 27, translating to an average of nearly 10,000 new accounts per day. In the absence of Rishi Gupta, the bank has appointed Chief Financial Officer Ketan Merchant as the interim head to oversee day-to-day operations.

Future Outlook and Analyst Views

The recent events have cast a shadow over the bank's future, including its plans to convert into a Small Finance Bank (SFB), for which it has already received an in-principle approval from the RBI. While the management has stated that the current issues are unlikely to impact this transition, the market remains cautious. Technical analysts have noted that the stock is in bearish territory. Jigar S Patel of Anand Rathi pointed out that support for the stock is at ₹136, with resistance at ₹154. Investors will be closely watching for any further developments from the DGGI and the company's ability to navigate this regulatory challenge while maintaining its growth trajectory.